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iPhones, Foxconn and Obama’s Empty China Rant

iPhones, Foxconn and Obama’s Empty China Rant

 

While President Obama took aim at China during his state of the union address this week, Apple was on its way in after-hours trading to becoming the most valuable company in the world– adding over $20 billion to their total stock market value. This rise was driven by another amazing quarter of  iPhone and iPad sales.

Apple is considered an “American company,”  but the score on Tuesday evening was China 1, Obama 0. Apple, like many consumer electronics firms, has outsourced most of their manufacturing work to China.

The President stated, “I will not stand by when our competitors don’t play by the rules…. Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China.” He also asserted that “Our workers are the most productive on Earth, and if the playing field is level, I promise you -– America will always win.”

But when it comes to jobs, the playing field is far from level, and most of what’s unleveling it has little to do with what the President considers unfair trade practices.

An article this week in the New York Times and a recent “This American Life” radio piece both provide details about life at one of Apple’s primary manufacturing partners – Foxconn.  By American work standards, the conditions are awful. The Times reports routine 12 hour day 6 day weeks with few breaks, and wages of  less than $2 per hour. The worker safety rules, protection of worker’s basic rights, and  input into conditions that we typically take for granted seem to be an after thought.

In the This American Life  Piece, Mike Daisy claims to have seen workers as young as 12 at the gates of the Shenzen facility, and interviewed several workers fired after crippling repetitive motion related injuries made them unable to work. Environmental regulations are considered to be equally lax.

As was quoted in the Times piece,  a former apple executive admitted that ”most people would still be really disturbed if they saw where their iPhone comes from.”

Many respected economists, including Paul Krugman, assert that these jobs still represent a significant improvement in prospects and a path out of poverty for those lucky enough to land them.  Others point out that workers in the US would probably not want them – especially given the working conditions and pay.

So the central question is really whether we are willing to accept lower standards for products produced outside of our country than those produced at home?

Isn’t this an unfair trading practice?  What exactly does an even playing field really mean?

In response to the criticism of the conditions under which Apple products are made, Apple is vowing to add transparency and more carefully audit the conditions of their sub-contractors to meet their code of conduct.  But given the type of work done in China,  and the radical wage difference, don’t expect these jobs to come back to the US anytime soon….unless consumers are willing  to give up buying iPhones and iPads as a way of voting with their pocket book.

That doesn’t seem likely.

Photo: Official White House Photo by Pete Souza

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9:39AM PST on Jan 31, 2012

Mike C.,

The bills you indicate are all corporate ascendancy legislation. They do not create jobs merely because they create profits for the corporation. The bottom line is that the incentive is NOT to create jobs unless there is no other way. The money to be saved by sacrificing our clean air and clean water will end up in bank accounts in foreign countries. Just like Mitt Romney's tax return shows.

Mitt Romney is running on his experience of job creation. Explain to me how jobs are being created with his 15% taxed billions in bank accounts in foreign countries, never mind his company busting experiences at BANE.

The debates between him and Obama will be a blood bath. Even Gingrich started to cut his throat on his job killing experience.

6:01PM PST on Jan 29, 2012

Outsourcing jobs to China and India has reduced the costs incurred by many western companies.

I find it interesting that these companies outsource IT, and production because workers in China and India will work for quarter of the pay their western workers do, yet none of these companies have suggested outsourcing management.

I'm sure that the average Chinese/Indian would fight to do their high paid jobs for $80,000 a year.

That could save companies a couple of million for every outsourced executive.

Makes the thirty bucks an hour outsource savings for 10 people look pathetic.

5:58PM PST on Jan 29, 2012

Outsourcing jobs to China and India has reduced the costs incurred by many western companies.

I find it interesting that these companies outsource IT, and production because workers in China and India will work for quarter of the pay their western workers do, yet none of these companies have suggested outsourcing management.

I'm sure that the average Chinese/Indian would fight to do their high paid jobs for $80,000 a year.

That could save companies a couple of million for every outsourced executive.

Makes the thirty bucks an hour outsource savings for 10 people look pathetic.

5:47PM PST on Jan 29, 2012

A bill that cuts the profits of US companies?

I was going to say good luck getting that through. But the bill will get through.

It will allow US companies to stop foreign companies who use the same tactics they do but who still manage to sell their product cheaper.

9:44AM PST on Jan 29, 2012

MIKE: GOOD ON YOU!! Is that Wyoming property Ocean Front?

9:35AM PST on Jan 29, 2012

If the iPhone were made in the US it would cost about $38 more. The supposed productivity at Foxconn shakes out like this, 8,000 employees? were roused from bed, given a biscuit and tea, and proceeded to make 10,000 iPhones in a 12 hour shift. Actually, they changed the screen glass. That works out to 1.25 per employee. If an American had production numbers like that he or she would be on the street.
Economics 101 teaches us that demand creates jobs. Americans are lazy, self-centered shoppers. There are products made here. Jeans, underwear, twine, fasteners, tools, appliances; the list is long. I buy these things. Many other products that are no longer made here I will purchased used, from the time when they were. I have a stove that was built in 1955. With minimal care and cleaning it will last far beyond 2055.
Two things need to happen. Tariffs need to be reinstated, which rewards companies that produce here, and people need to learn how to shop. It's not a sport or a hobby, btw. Joining the race to the bottom by buying junk and lowering wages, reduces demand, which lowers corporate profit. More demand is created by paying living wages. Unions have always known this. Henry Ford knew it. Pay people enough so that they can afford what they make and demand increases.
On another note, related to a post here - I actually do have some land in Wyoming that I'll part with for about $150 per acre :-)

9:06AM PST on Jan 29, 2012

James, Quote "For any Chinese who might be able to read this, it the story is true that workers housed in dorms who work 72 hours a week were routed out of bed to rush iPads into production, why do you call yourselves socialists? Go read Ludek Pachman's Checkmate in Prague. Chinese revolution 1911-2011, ha ha! Dialectical materialism with an unquestioned reverence for technology has displaced social conscience"

James, what you do not know about Chinese people is tremendous. Not just you , but America and I would guess most of the world. Chinese do not even know what Socialism or Communism Means, not alone what Dialectical Materialism means. Have no idea at all what democracy is.

The only thing that really matters to the Chinese People is their immediate family back to the Grandparents. Nothing else matters.....No family member left behind!!

You must consider this country is about 15 or more centuries of Monarchies, Then Later 40 years of Mao's Communism. The last 20 years Communism that has embraced Capitalism but not democracy.

Probably the only Government in the World afraid of Twitter or Face Book and You Tube....Their interference in Chinese daily life is Minimal. No Cops trying to arrest you for speeding. No cops hanging out at bars to arrest you for Drunk driving. People do not get all fidgety when the Police are behind them, Hardly even notice.

The only thing Chinese are angry about is their lack of access to World information. In t

5:49AM PST on Jan 29, 2012

For any Chinese who might be able to read this, it the story is true that workers housed in dorms who work 72 hours a week were routed out of bed to rush iPads into production, why do you call yourselves socialists? Go read Ludek Pachman's Checkmate in Prague. Chinese revolution 1911-2011, ha ha! Dialectical materialism with an unquestioned reverence for technology has displaced social conscience.

1:57AM PST on Jan 29, 2012

Ran out of room on my last post, so please read my next post first then this one. But the long and short of it is we battled out of the last GREAT DEPRESSION by building Americas infrastructure. The Interstate Hiway system. Bridges, Modified the railways to go to every city and many towns. Throw in building National Parks. Everywhere the workers went new businesses opened up to take care of their needs. AMERICA BLOSSOMED again. Our infrastructure was the envy of the world. Tourism boomed. New Businesses to accommodate were born.
Thing is the life span of what they created was calculated to last 70 years. Guess What People ? It's slightly over 70 years now. The Timing is perfect, The Blue Print is drawn. Add in a few more things, like Lite Rail, Interstate Bullet Railways coast to coast. I'm sure each and everyone of you can add to my list. Can we tweek EMS to be better than it is?
So why don't we just do this? (please read my first post). It's important to the ONE WORLD ECONOMY, ONE WORLD BANK that the American Working Class and Middle class are brought to their knees and be begging for jobs at $5.00 an hour.
When this work absolutely has to be done. The GOV will turn a blind eye to all the illegal aliens doing it, and or Hire Coolies from some Asian Nation. Because as every POLITICIAN knows AMERICANS hate to work. (Yes this is Sarcasm) (Please read my first post on the ONE WORLD ECONOMY, ONE WORLD BANK).

1:03AM PST on Jan 29, 2012

This is just my opinion so take it for what it's worth.
It seems to me many Americans believe that this is just a reccesion.(sp) That eventually we will pull out of it. My opinion is that this is full scale rape of the American working and middle class in the Name of THE ONE WORLD ECONOMY, ONE WORLD BANK. The propaganda goals are to redistribute wealth and jobs all over the world equally.
Of Course the already filthy rich are not going to use their money to pay for this redistribution of wealth. They are going to take our money and our jobs and redistribute them and they are not going to be taking any votes on this.
Take a look around. The rape is well under way. Don't Believe me. Then why in the world would the U.S.Government still be giving TAX INCENTIVES for Corporations to leave our Country. Thats right, in a time when millions of Americans are out of work, The Gov is giving tax incentives for corporations to leave the country. If that makes sense to you, well then I have some Ocean front property in Montana for you for just $100 dollars an acre or best offer. How many acres can I sign you up for???
The Blue Print for ending this Depression is here and available. But for some reason no one is acting on it. The Blue Print was drawn up some 70 years ago during the Last GREAT DEPRESSION. They Built this nations infrastructure. Interstate highway system, bridges, modified the railway system, built the National parks etc. Every where th

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